by Jeffrey DiLiddo
Simply put, the term “Revenue Cycle” refers to the process used by healthcare professionals to attempt to collect payment for medical services. Unfortunately, the process isn’t simple at all. While there may be some perception that Electronic Medical Record [EMR] and Practice Management [PM] software have automated and simplified this process, the reality is that getting paid is more complicated than ever. Today’s health care delivery model is more electronic than ever. According to HealthIT.Gov, “As of 2017, nearly 9 in 10 (86%) of office-based physicians had adopted an EHR”. More and more people working inside the medical office, from the front desk staff to the providers, and billing team touch the revenue cycle every day.
Having strong revenue cycle management processes ensures that your practice not only has the incoming revenue to cover its expenses, but it enables the organization to invest in constantly improving patient care services. Without a focus on billing and the revenue cycle hospitals and medical practices face closure, and it’s a growing concern. Revenue Cycle Management starts long before the patient arrives and continues long after they leave and it’s riddled with failure points. Let’s break down the major areas of concern;
Provider Credentialing, Enrollment and Insurance Contracting
Before a practice or hospital can expect to be reimbursed for services rendered by a new provider, they need to have verified that provider’s licensure and credentials. The processes of provider enrollment ensure the provider has received approval to bill government and Third Party Payers for services. In order to be considered “in network” providers must go through both processes. Practices get themselves into billing and claims-denial trouble when new providers come on board to help pick up some clinic productivity, and attempt to bill insurances prior to completing credentialing and enrollment activities. Even with a full roster of enrolled providers, practices need to pay close attention to their insurance contracts. Contracting is the process whereby medical practices negotiate what they will be reimbursed by third-party payers for serving their patients. Health insurance companies will typically not reimburse practices without a contract. Competitive bidding is an open selection process for government contracts between multiple groups who will attempt to gain the contract by submitting the most attractive agreement. RevenueHealth’s software tracks and instantly identifies Provider Credentialing Issues with detailed, actionable data to help your Credentialing team (or vendor) resolve issues immediately.
Registration, Preauthorization, and appointment scheduling
The process of collecting demographic and insurance coverage information for the patient might be one of the single most important functions to ensure successful reimbursement for services. Collecting accurate patient demographic data, verified active insurance coverage, and validated pre-authorizations for services is where practices tend to fall down most frequently. We’ve analyzed millions of medical insurance claim denials, and by far, patient demographics, insurance eligibility, and authorization errors account for the largest single percentage of denials. The good news is that this is one of the easiest areas to correct. Practices that use denial management systems and analytics tools to deliver actionable information used in training the patient registration teams have some of the lowest denial rates in the country. RevenueHealth’s workflow management and denial source identification technology give you the exact information you need to know who needs training, and what training they need. Recurring reports with detailed, actionable, claim-level data can help your patient registration and front desk team understand the financial impact of mistakes made during this process.
Medical Coding, Charge Capture, and Claims Preparation
After the patient’s appointment is scheduled and they are seen, healthcare providers will typically update the EMR to document the services they performed. The process of converting those medical notes into billable charges is referred to as “Medical Coding and Charge Capture”. In order to be reimbursed, medical services must be converted into alpha-numeric codes. Procedures and services and converted to “CPT” or “HCPC” codes and diagnoses are converted into “ICD-10 codes” The combination of these procedure and diagnosis codes dictates not only if medical insurance will cover a claim, but at what dollar amount. Modern EMR systems have the ability to guide the provider in the charge capture process, but certified Medical Coders are typically employed to ensure that the conversion and combination of these codes meet federal compliance guidelines while being reviewed to optimize payment. Medical coders are also instrumental in compliance auditing and training functions performed in the practice. Armed with the right data from our software systems, coders and trainers can help the providers fine-tune their coding and charge capture processes to minimize claim denials
Claims Submission, Remittance processing, and Claim Denial Management
Many practices, some as frequently as daily, will batch claims to be submitted to their claims routing clearinghouse or payers. Typically claims are validated to ensure they have the minimum requirements necessary for acceptance at the payer. Electronic claims are usually routed via claims clearinghouse and must be in HIPAA standard ANSI 837 file format. If a claim does not meet a payer’s basic format and content requirements, it will be “rejected”. Rejection management is the process of managing claims that were submitted electronically to the payer, but not accepted for adjudication. Because these claims are not on record at the payer at all, it’s critical that they are tracked, fixed and resubmitted as soon as possible.
Once the payer adjudicates the claim, they will report their decision via remittance file. Some might agree that your payer remittance data is the “source of all knowledge” in terms of the determining health of your revenue cycle. Living in your remittance data is every payer decision on every claim successfully sent, along with all of the details about the service and their detailed reason codes. Electronic remittance advice files are typically transmitted via a claims clearinghouse in HIPAA standard ANSI 835 file format. An important component of an organization’s overall Revenue Cycle, it is the timely response to remittance data, when a payer has reported they are denying payment for a claim. Overall the process includes collecting, organizing, and prioritizing the information from remittance files, and then going through the effort of correcting or appealing the claims with the payer. Our multifaceted approach to denial source identification automates the capture, analysis, and prioritization of complex claim and remittance data, helping you find the most efficient way to work your claim denials while simultaneously giving you the data you need to stop the inflow of new denials.
Accounts Receivable [A/R] Analysis and Management
Accounts receivable refers to the money owed to any practice for medical services that you have performed and billed. Typically unbilled activity is not represented on the open receivable. A/R Management might be where most billing shops find themselves drowning in work. Without quality processes, training and controls to make sure that front-end and provider coding teams are capturing the most accurate information prior to claims submission, billing teams will often struggle to keep up. In terms of costs, this is typically the most expensive function in your medical billing process due to the complexity and expertise it takes to effectively collect reimbursement on aged claims balances. Most practice management systems do not offer detailed A/R analysis tools that allow their RCM and Billing team to quickly identify the source of growing aging buckets. Team members are forced to pull unpaid claims reports into excel and pivot the data to the point where they can understand where the biggest balances are, and where to focus their energy first. A week later, all of the data has changed and if they’re fortunate enough to have the staff to perform the analysis that frequently, they have to start all over again. A/R Analysis and Management software can automate this function for your team, identifying the most critical claims and automatically creating your team’s priority worklists. When coupled with Denial Management Software, the resulting improvements to cash collections can be exponential
Business Intelligence and Analytics
It’s called the revenue “cycle” for a reason. All of the activity and data collected from every part of the process needs to be analyzed, evaluated and fed back into the process so improvements can be made. The data needs to be timely, accurate, and most of all actionable. We’ve met practice management teams are just paralyzed from the sheer volume of data that comes there way with little context or value. Data should be the foundation of any decision-making process, therefore we’ve made it the foundation of our software solution. Every system we produce ties back into our analytics and BI tools giving you comparative analytics from all sides of your revenue cycle. Understand which billers work the most claims and have the highest resolution rates. Compare key metrics by practice, location, department, provider and more! Get data that goes well beyond the “Top 10 Adjustment Code” report you get from your Practice Management System or Clearinghouse. Instant visibility enables you to engage your front-end staff, providers, coders and billing team to minimize mistakes can collect the cash your practice deserves for rending medical services.
In summary, it takes a multifaceted approach. Keeping every part of your practice informed about their impact on your revenue cycle gives you the best chance for success. Revenue cycle management software can alleviate much of the time spent trying to reach your goals, and protect the health of your practice.